Part 6, Chapter 3: Manual Exhibit 6-3-E

The purpose of this allocation of funding needed for all Public Law (P.L.) 93-638 compacts and contracts is to provide for an equitable allocation of available appropriated resources when considering the overall level of contract support costs (CSC) need currently being funded each awardee eligible for increased CSC funding. The allocation of Pool No. 3 funding by this methodology will:

allocate 50 percent of available CSC shortfall funds to those awardees with the greatest CSC shortfalls in order to raise the minimum level of CSC funded to the highest level possible (a bottom-up approach);

allocate 50 percent of the available CSC shortfall funds to all P.L. 93-638 contractors and compactors that have a CSC shortfall; and

provide relatively larger increases to those with the greatest shortfalls, thus decreasing variations in overall CSC shortfall percentages among all awardees by providing larger payments to those with the lowest percentage of their overall CSC need funded, while at the same time moving all awardees closer to 100 percent funding.

The Headquarters allocation of Pool No. 3 funds will be made according to the following methodology:

As soon as possible in the FY, but not later than March 30 the amount of the ongoing CSC requirements will be computed from the data provided in Section 6-3.5, “Contract Support Costs Shortfall Report,” of this chapter.

The percentage of CSC funding available for paying CSC shortfalls will be computed by dividing the total funding available for CSC shortfall by the requirement for ongoing CSC shortfall identified above.

Fifty percent of the amount available for Pool No. 3 will be allocated to those awardees with the greatest CSC percentage shortfall in such a way as to raise the minimum level of CSC funded to the maximum percentage possible (a bottom-up approach).

After making the allocation required in paragraph (3) above, the remaining 50 percent of the amount available for Pool No. 3 shall be allocated proportionately to all awardees with a CSC shortfall.

The allocation methodology for paragraph (4) above can be described mathematically as follows:

Fs= (ACSC_ ACSCa) * (Pool 3 /(TCSCr-TCSCa))

Where:

FS = New CSC shortfall funding to be received for any awardee.

ACSCr = Total ongoing CSC requirement for the awardee (after the allocation under paragraph (3) above).

ACSCa = Total CSC funding available for the awardee (after the allocation under paragraph (3) above).

TCSCr = Total ongoing CSC requirement for all awardees (after the allocation under paragraph (3) above).

TCSCa = Total CSC funding available for all awardees (after the allocation under paragraph (3) above).

An example of this allocation methodology follows. The example assumes that eight awardees have approved total CSC requirements (TCSCr) for the fiscal year totaling $41 million. The total CSC shortfall for the eight awardees is $9,459,500, and the total CSC funding available (TCSCa) for CSC shortfalls under Pool No. 3 is $5 million.

Bottom-Up Distribution of First

Tribe

Total CSC Need

Available CSC Funding

Percent of CSC Need Funded

Minimum Percent of CSC Fundable

Bottom-Up Distribution of First 50 percent

New Total CSC Funded

New percent of CSC Need Funded

Tribe 1

$5,000,000

$4,900,000

98.00%

80.14%

$4,900,000

98.00%

Tribe 2

$1,000,000

$250,000

25.00%

80.14%

$551,436

$801,436

80.14%

Tribe 3

$500,000

$288,000

57.60%

80.14%

$112,718

$400,718

80.14%

Tribe 4

$4,000,000

$3,280,000

82.00%

80.14%

$3,280,000

82.00%

Tribe 5

$12,500,000

$10,232,500

81.86%

80.14%

$10,232,500

81.86%

Tribe 6

$7,000,000

$5,160,000

73.71%

80.14%

$450,051

$5,610,051

80.14%

Tribe 7

$5,000,000

$3,880,000

77.60%

80.14%

$127,180

$4,007,180

80.14%

Tribe 8

$6,000,000

$3,550,000

59.17%

80.14%

$1,258,615

$4,808,615

80.14%

$41,000,000

$31,540,500

76.93%

80.14%

$2,500,000

$34,040,500

83.03%

Break Point %: 80.14%Available for Bottom-Up Allocation: $2,500,000

Proportionate Distribution of Remaining

Tribe

Total CSC Need

Available CSC Funding (After bottom-Up)

Percent of CSC Need Funded

CSC Shortfall (Unfunded Need)

Proportionate Distribution of Remaining 50 percent

Final Total CSC Funded

Final Percent of CSC Need Funded

Tribe 1

$5,000,000

$4,900,000

98.00%

$100,000

$35,922

$4,935,922

98.72%

Tribe 2

$1,000,000

$801,436

80.14%

$198,564

$71,328

$872,764

87.28%

Tribe 3

$500,000

$400,718

80.14%

$99,282

$35,664

$436,382

87.28%

Tribe 4

$4,000,000

$3,280,000

82.00%

$720,000

$258,639

$3,538,639

88.47%

Tribe 5

$12,500,000

$10,232,500

81.86%

$2,267,500

$814,534

$11,047,034

88.38%

Tribe 6

$7,000,000

$5,610,051

80.14%

$1,389,949

$499,299

$6,109,350

87.28%

Tribe 7

$5,000,000

$4,007,180

80.14%

$992,821

$356,642

$4,363,822

87.28%

Tribe 8

$6,000,000

$4,808,615

80.14%

$1,191,385

$427,971

$5,236,586

87.28%

$41,000,000

$34,040,500

83.03%

$6,959,500

$2,500,000

$36,540,500

89.12%

% of Shortfall to be funded: 35.92%Available for Proportionate Allocation: $2,500,000

All awardees on the list would receive some funding for their CSC shortfalls for the FY. Only those awardees with less than 80.14 percent of their CSC need funded would receive a payment from the distribution of the first 50 percent. All awardees would receive funds in proportion to the existing CSC shortfall of the remaining 50 percent of available Pool No. 3 funds. After the shortfall allocation, the range of funded shortfall for all awardees in the group narrows to between 87 percent and 99 percent.